Spotlight

Indian equity markets are likely to remain cautious as investors continue to digest the Reserve Bank of India’s decision to raise the repo rate to 5.50%. Concerns over the inflation outlook are also likely to remain in focus, with CPI inflation estimated to peak around 6.8% in November 2026 and the repo rate potentially moving towards 6% by December. The combination of tighter domestic monetary policy and elevated inflation expectations could weigh on rate-sensitive sectors and overall market sentiment.

Geopolitical risks remain elevated, with strikes reported on Saudi airports amid an escalation in fighting involving the Houthis. The uncertain geopolitical environment continues to pose risks to global risk appetite and energy markets. WTI crude is currently trading around the $88–90 per barrel range, while Brent crude remains above the $100 mark. Sustained elevation in crude prices could add further pressure on India’s inflation outlook, import bill and external balances.

The currency remains under pressure, with continued weakness in the Indian rupee adding to the broader macroeconomic concerns. Meanwhile, U.S. 10-year Treasury yields remain near multi-decade highs, while foreign investors have remained net sellers for several consecutive weeks. Persistent FII outflows and elevated U.S. yields are limiting the cushion that could otherwise offset the impact of domestic monetary tightening. Without a meaningful reversal in FII flows or a moderation in U.S. yields, Indian equities could remain vulnerable to further downside, particularly if domestic tightening continues alongside global rate pressures.

Asian markets are also witnessing weakness amid renewed concerns over inflation and interest rates. The Nikkei 225 is down more than 1%, while the KOSPI is lower by over 0.5%, indicating a cautious global risk environment and potentially limiting positive external cues for Indian equities.

Technical View 

Nifty 50 

Nifty 50 continues to remain under pressure, with selling pressure emerging at higher levels and the broader technical structure still indicating weakness. On the upside, the 22,750–22,800 zone is likely to act as the immediate resistance area. A sustained move above 22,800 could provide some stability and support a recovery towards the 23,000 region. However, failure to reclaim this zone could keep the index vulnerable to renewed selling pressure.
 
On the downside, 22,500 remains the immediate support level. A decisive break below 22,500 could intensify the selling pressure and expose the index to the 22,400–22,200 zone. The broader setup is likely to remain cautious as long as Nifty trades below 22,800, while subdued momentum and recent price action continue to indicate weakness. Overall, the near-term technical outlook remains cautious.

Bank Nifty 

Bank Nifty has demonstrated comparatively better resilience, although the broader technical structure remains mixed and cautious. On the upside, the 55,200–55,400 zone is likely to act as the immediate resistance area. A sustained breakout above 55,400 could strengthen the near-term technical setup and support a recovery towards the 55,800–56,000 region.  
 
On the downside, 54,600–54,400 remains the immediate support zone, followed by the psychological 54,000 level. Momentum indicators remain mixed, suggesting a cautious near-term setup and limited directional conviction. Overall, the near-term technical outlook for Bank Nifty remains cautiously constructive and range-bound.